A Home of Their Own

Single young consumers forego the rent and move straight to
mortgage payments.

They're young, they're single, and pretty soon, there will be
more of them. Whether they're Gen Xers putting off wedding plans or
the leading edge of Echo Boomers just out of college, the number of
unmarried people ages 18 to 34 is slated to grow from 33 million to
38 million between next year and 2010, a 16 percent increase.

Single young adults have always had money to spend, but a
growing number have lots of it. The number of unattached
18-to-24-year-olds making over $50,000 a year grew by 75 percent
from 1994 to 1997, while the number of single 25-to-44-year-olds
making the same amount grew by 59 percent. Six-figure earners in
both categories also showed respectable growth: 38,000 singles aged
18 to 24 made over $100,000 in 1997, an increase of 65 percent over
1994, while 241,000 25-to-44-year-olds did the same, a 35 percent
increase.

So what are all these young turks doing with their new-found
fortunes? Even if they're not shopping for his-and-hers towels,
they're ready to buy a home and start planning for the future.
Singles of all ages are sheddingtheir renter images and buying
homes, from apartments and condos to single famil y units.

Although the number of singles buying homes grew only 0.2
percent from 1997 to 1998, a "tremendous" 28.9 percent increase was
reported the year before, according to Chicago Title Corporation's
Annual Survey of Recent Home Buyers. And by next year, the
traditional home buyer - a married couple with two kids - will make
up less than 25 percent of first-time buyers, according to a report
by marketing firm Dragonette, Inc. Single households, on the other
hand, will total about 36 percent of all first-time buyers.
(First-time buyers make up about 42 percent of the nation's housing
market.)

In Chicago Title's 1998 survey, some metropolitan areas showed
significant increases in single home buyers of all ages. San
Francisco, where 55 percent of all home buyers had never been
married (versus 47 percent in 1997), is one of the hot markets. In
Washington, D.C., 24 percent of home buyers were singles, up 1
percent, while Denver's population of single home buyers increased
from 19 percent to nearly 24 percent. One out of four buyers in
Minneapolis and Miami were also single.

Basking in the glow of Silicon Valley, San Francisco's young,
techno-savvy crowd is flocking to the trendy South of Market area.
Mark Calabria, senior economist with the National Association of
Realtors, estimates that about 20 percent of the Bay area market is
scooped up by singles under age 35, about double the national
average of 10.7 percent. "If you looked at the demographic profile
of loft buyers in San Francisco, at least 75 percent would be under
age 30 and single," says John McInerney, managing broker with TRI
Coldwell Banker Real Estate in San Francisco.

"We have a lot more young professional people with disposable
income buying property - and not just cheap property," says Helen
Marshall, a broker with the city's Century 21 Hartford Properties.
With an average selling price of $400,000 (popular lofts run from
$350,000 to $800,000), homes in the area may not be cheap, but with
a booming regional economy, they are affordable for young singles.
"There's a tremendous amount of wealth in the Bay area right now,"
McInerney points out.

Young bachelors aren't the only ones laying out welcome mats -
single women are picking up property at the same pace as their male
counterparts. In fact, single women of all ages have nearly doubled
their share of the national home buying market in the last ten
years, from 10 percent in 1987 to 18 percent in 1997, according to
Calabria. Single men, on the other hand, accounted for 11 percent
of the market in 1997, up from 7 percent ten years earlier.

In Denver, the numbers skew more toward single men in their
early thirties. Single buyers in the area have shied away from
condos, says Marcia Toll, a broker for the Kentwood Company at
Cherry Creek in Denver, preferring to sink their money into
single-family homes, which are considered a more solid investment.
Average prices range from $180,000 to $280,000, she adds, but with
a tight rental market, it's usually less expensive for singles to
buy.

Managing the down payment seems to be no problem: Toll reports
that a number of young singles put down 20 percent to 30 percent.
"A lot of them are professionals who have been saving for that
reason, or they get part [of the down payment] from their
families," she says.

With more high-tech jobs sprouting up in the suburbs of
Washington, D.C., the region's economy has picked up and encouraged
a host of young buyers. "Probably 50 percent of our business is
first-time singles - men and women - who are tired of paying rent,"
says Steve Jacobson, associate broker of Brian Logan Real Estate in
Washington. These young adults don't want to live a "sterile"
suburban life: "They want the convenience. They want the
neighborhood lifestyle. They grew up in the 'burbs and want to get
away from them," he says.

Condo sales are running head-to-head with single-family homes in
the area, says Dale Mattison, associate broker with Washington's
Long and Foster Realtors. Homes average for about $200,000, with
condos ranging from $90,000 to $25 0,000.

The biggest factor aiding young single home buyers is D.C.'s
$5,000 tax credit for first-time buyers with certain income levels,
says Jacobson. Depending on income, some new home buyers in the
city aren't required to pay property taxes for the first five years
of ownership.

Although Jacobson reports an equal split between young women and
young men buying homes, he has noticed more higher-income women
than men becoming first-time home buyers. Mattison estimates that
about 60 percent of the young singles he's seen buying homes are
women. "Women are making more money, and are becoming equally
astute to the advantages of ownership," he says.

Young singles may still be a relatively small part of the
overall real estate market, but there's a better chance today that
your next new neighbor will be someone like one of the clients of
Ruth Dickie, manager of Long and Foster's Bethesda Hamden Square
office. The client, a 29-year-old former college basketball player,
decided two years ago that marriage was not in her immediate
future. Since then, she's adopted two children and bought a home in
Kensington, Maryland.

"Twenty years ago, a single woman wouldn't have considered
buying a home," Dickie says. "She would have continued renting."
Now, though, nearly everyone can enjoy the life of a homeowner -
even those times when the water heater dies and she's the one with
a wrench in her hand.